City wasting $400,000 a month on phones, Pratt's lawyer says

VIDEO Pratt says there's conflict of interest in phone case

City Comptroller Joan Pratt talks about her lawsuit against Mayor Stephanie Rawlings-Blake's administration's efforts to install a new phone system she says was not properly bid out. (Kim Hairston/Baltimore Sun)

City Comptroller Joan Pratt talks about her lawsuit against Mayor Stephanie Rawlings-Blake's administration's efforts to install a new phone system she says was not properly bid out. (Kim Hairston/Baltimore Sun)

Baltimore is wasting about $400,000 every month it does not install a new phone system, a lawyer for Comptroller Joan M. Pratt argued in court Thursday. But the mayor's lawyers argued that Pratt has no legal right to sue the city because she is a city officer.

Pratt and Mayor Stephanie Rawlings-Blake have been sparring for months over who should upgrade the city's phone system, leading to a war of words, an investigation by the city's inspector general and now a court battle.

"The city is throwing money down the drain," said Pratt's attorney, Charles G. Bernstein, a former city judge who works for Orioles owner Peter Angelos' law firm.

City Solicitor George Nilson argued that Pratt has herself to blame for the state of the city's phones. It took Pratt's office, which runs the system through the Municipal Telephone Exchange, more than four years to complete a process for approving an overhaul, he said.

Moreover, Nilson argued, Pratt has no right to sue. And he filed a motion seeking to have Bernstein's appearance in the case stricken, so Pratt would have to argue the case.

"People within the government cannot sue the government," Nilson said. "If you allow them to sue the government, we would be suing each other on a regular basis."

Such rules are "a way to prevent the city from turning on itself, eating its own limbs and eating itself," Nilson said.

Circuit Judge Jeffrey M. Geller delayed ruling on several motions or the merits of the suit. But he gave the mayor's office an early victory by denying Pratt's motion for a temporary restraining order to prevent the mayor's office from upgrading the phones — or paying any firm for such work.

The city submitted a sworn statement from its chief information officer, Chris Tonjes, saying it was not currently working on a phone upgrade and had no plans to do so.

Tension between Pratt and Rawlings-Blake flared in June, when the mayor moved to defer a $7.4 million contract with IBM for a new phone system, and Pratt accused her of trying to install a phone system without going through the proper bidding process. The next month, Baltimore's Board of Estimates, which is controlled by Rawlings-Blake, rejected the IBM contract.

Pratt said IBM was the lowest bidder and should have been awarded the work.

Meanwhile, the mayor's office contended that it had the right to buy equipment for a Voice on Internet Protocol pilot project under an existing contract with Digicon Corp. Another contract with Digicon provided staffing. VoIPoice systems allow calls to be placed through the Internet rather than traditional phone lines and are considered more efficient.

The judge's ruling Thursday against a restraining order means the city can pay Digicon $137,000 — the final part of about $955,000 for certain equipment purchases and staffing.

In her lawsuit, Pratt contends that because Digicon didn't participate in the bidding process in which IBM emerged as the winner, the company shouldn't be allowed to continue work on a new phone system.

"It is IBM or nothing," Bernstein said in court Thursday. "If the mayor does nothing, then we continue to waste $400,000 a month, $5 million a year."

At the hearing, both sides lamented the state of the city's phones. Nilson called the Verizon Centrex system the city currently uses "outmoded, outdated and too expensive." Bernstein characterized the phone system as "lousy."

Tonjes and Pratt met last week to talk about what to do next. The administration proposed a memorandum of understanding that would create a new commission to oversee the city's phone system and to find additional savings beyond what the original IBM contract promised.

"Hopefully, the comptroller will now drop this frivolous lawsuit and approve the proposed" memorandum, said Ryan O'Doherty, Rawlings-Blake's spokesman. "While the comptroller is suing the city she's responsible for serving, the mayor has proposed a solution that demands cost savings, accountability and transparency. Let's stop suing and start doing."

Tonjes said he took issue with some provisions in the IBM contract. The contract called for an estimated $320,000 in travel and relocation costs for IBM workers and tax breaks for out-of-state workers whose home states have lower tax rates, the mayor's office said. Tonjes also took issue with higher hourly rates for some IBM workers than what his office now pays for the same functions.

On Thursday, Pratt said the mayor's own offices vetted and approved the IBM deal.

"The contract has been vetted," she said. "It has been approved and brought forward to the Board of Estimates by the mayor's purchasing department. So there's nothing wrong with the contract."

Ian Brennan, a spokesman for the mayor, said the mayor's purchasing office does not vet the results of the comptroller's requests for purchases.

IBM spokesman Clint Roswell said in a statement: "IBM stands ready to deliver a modernized communications system so the City of Baltimore can better serve its citizens."

Pratt added that she had concerns about the memorandum of understanding, saying her office wasn't invited to help draft it. "In my opinion, it is one-sided."

Digicon did not respond to requests for comment. Verizon declined to comment.

The city's inspector general investigated Rawlings-Blake administration's purchase of nearly $675,000 in phone and computer equipment and found possible conflicts of interest and missed opportunities for "significant cost savings." Inspector General David N. McClintock also found that the mayor's technology office withheld information from other city officials about the project.

But McClintock said in an interview that his probe found no illegalities.

The next hearing date in the case, styled Pratt and Joan Doe, Taxpayer, v. Mayor and City Council, has not been set.